Mistry alleged on Tuesday that Tata had sought to sell what would eventually grow into the country’s biggest software company to IBM sometime in the 1980s.Jochelle Mendonca&Megha Mandavia | ET Bureau | November 24, 2016, 09:08 IST

Tata GroupMUMBAI: The Ratan Tata-led Tata Group launched a counterattack against Cyrus Mistry in the month-long power struggle between the two men that shows no signs of ending as both sides gird themselves for the next phase —shareholder votes at group companies.

Mistry alleged on Tuesday that Tata had sought to sell what would eventually grow into the country’s biggest software company to IBM sometime in the 1980s and grossly overpaid for Corus to satisfy his ego at the expense of shareholders and employees.

“At no point at that time was there ever an intention of the Tata Group to sell TCS to IBM,” Kohli said in a release issued by TCS, one of at least three statements by the Tata Group on Wednesday aimed at refuting aspersions cast on Ratan Tata’s judgement by the Mistry camp the previous day. Kohli said the statement by Mistry’s office about TCS’ sale proposal, said to have occurred when he was in hospital, was a misrepresentation of events.

“With reference to the timeline of the entire episode I would also like to point out that my heart bypass surgery took place in 1984,” he said.

“Mr JRD Tata was interested in my health and progress after the surgery and he established contact with my surgeon at Houston. He also wanted to know when I would be well enough to return to India.” The letter from Mistry’s office had described the episode as a “near-death experience for TCS at the hands of Mr Ratan Tata”.

Mistry’s office didn’t dispute Kohli’s contention. “Mr Mistry has the greatest respect for Mr Kohli and does not wish to join issue with him on the statement that he has made. Mr Mistry agrees with him that there was no intention of the Tata Group selling TCS to IBM or to any other company,” it said on Wednesday.

“The statement Mr Mistry made was based on information from sources who were close to JRD Tata who informed him that it was Ratan Tata’s intention, and not the group’s intention, to sell TCS.”

Muthuraman, former vice-chairman and managing director of Tata Steel, said: “I am surprised and very sad to see the speculative and biased views being fed in the media regarding the acquisition of Corus nearly a decade back in early 2007.”

That the purchase turned out to be a drag on the group’s finances was due to circumstances beyond the company’s control.

“The sudden and unprecedented scale of the global financial crisis in 2008 had a very significant adverse impact on the industry fundamentals in Europe which also impacted the performance of Corus,” he said. “Therefore, such frivolous and unconsidered comments on the acquisition should be avoided.”

Mistry’s office had said the Corus deal was badly timed.

“It is common knowledge that the decision to acquire Corus for over $12 billion, when only a year earlier it was available at less than half that price, was based on one man’s ego and against the reservations of some board members and senior executives,” Mistry’s office said. “The overpayment made it harder to invest in the acquired assets which had been neglected, and thereby, placed many jobs at risk.”

WELL THOUGHT-OUT STRATEGYMuthuraman rejected this argument and said that the acquisition had served Tata Steel well. Tata bought Corus in 2007 at the peak of commodity cycle in what was one of the largest overseas acquisitions by an Indian company at the time.

“The long-term strategy of Tata Steel was well thought out after a lot of deliberation to grow the company through capacity expansion in India and internationally through inorganic growth,” he said.

“Following the successful acquisition of NatSteel in Singapore and Millennium Steel in Thailand, Corus Group plc provided a natural fit for the portfolio especially since the Netherlands facilities which is the gold standard in competitive positioning were part of the asset perimeter.”

Muthuraman, who was running Tata Steel at the time of the acquisition, added that the value of Corus increased after the initial bid in line with the commodity price boom, its underlying performance and the transaction process.

Mistry had alleged that the overpayment to buy Corus made it harder to invest in acquired assets that had been neglected, and thereby placed many jobs at risk.

“The acquisition proposal was extensively deliberated in the board and the board approved the transaction,” Tata Steel said in a statement. “As a responsible listed company, Tata Steel also made appropriate disclosures at various stages of the transaction to the regulators during years 2006 and 2007. These disclosures are available on the websites of the stock exchanges.”

Mistry’s office said on Wednesday that his point was that “the ultimate decision was not unanimous, but there were differences and reservations significantly, the fact that Corus was available for purchase at half the price in the recent past is undisputed”.

The corporate battle at the Tata Group broke out into the open when Mistry was sacked as chairman of holding company Tata Sons on October 24 and his predecessor Ratan Tata returned to take back control as interim chairman. Since then, both sides have been attacking each other in the media.

Tata Sons has called extraordinary general meetings (EGM) of various group units including TCS, Tata Chemicals and Indian Hotels Corp to seek shareholder votes to evict Mistry from their boards. On Wednesday, Tata Motors called a shareholder meet on December 22 to consider Tata Sons' proposal to remove Cyrus Mistry and Nusli Wadia as directors.